Over half of all new cars sold in the U.S. by 2030 are expected to be electric vehicles. That could put a major strain on our nation’s electric grid, an aging system built for a world that runs on fossil fuels.
Domestic electricity demand in 2022 is expected to increase up to 18% by 2030 and 38% by 2035, according to an analysis by the Rapid Energy Policy Evaluation and Analysis Toolkit, or REPEAT, an energy policy project out of Princeton University. That’s a big change over the roughly 5% increase we saw in the past decade.
“So we’ve got a lot of power demand coming to this country when we really didn’t have any for the last, like, 25 years,” said Rob Gramlich, founder and president of Grid Strategies, a transmission policy group.
While many parts of the economy are moving away from fossil fuels toward electrification — think household appliances such as stoves, and space heating for homes and offices — the transportation sector is driving the increase. Light-duty vehicles, a segment that excludes large trucks and aviation, are projected to use up to 3,360% more electricity by 2035 than they do today, according to Princeton’s data.
But electrification is only an effective decarbonization solution if it’s paired with a major buildout of renewable energy. “So we have both supply-side and demand-side drivers of big grid needs,” Gramlich said.
That means we need major changes to the grid: more high-voltage transmission lines to transport electricity from rural wind and solar power plants to demand centers; smaller distribution lines and transformers for last-mile electricity delivery; and hardware such as inverters that allow customers with home batteries, EVs and solar panels to feed excess energy back into the grid.
Charging electric vehicles is quite electricity intensive. While a direct comparison with appliances depends on many variables, an owner of a new Tesla Model 3 who drives the national average of around 14,000 miles per year would use about the same amount of electricity charging their vehicle at home as they would on their electric water heater over the course of a year, and about 10 times more electricity than it would take to power a new, energy-efficient refrigerator. Larger electric vehicles such as the Ford F-150 Lightning would generally use more electricity than a central AC unit in a large home.
Lydia Krefta, director of clean energy transportation at PG&E, said the utility currently has about 470,000 electric vehicles connected to the grid in its service territory of Northern and Central California and is aiming for 3 million by 2030.
Given that PG&E’s territory covers about 1 in 7 electric vehicles in the U.S., how it handles the EV transition could serve as a model for the nation. It’s no easy task. The utility is tied to a four-year funding cycle for grid infrastructure upgrades, and its last funding request was in 2021. Now that funding will definitely fall short of what’s needed, Krefta said.
Workers for Source Power Services, contracted by Pacific Gas & Electric (PG&E), repair a power transformer in Healdsburg, California, on Thursday, Oct. 31, 2019.
David Paul Morris | Bloomberg | Getty Images
“A lot of the analysis that went into that request came from, like, 2019 or 2020 forecasts, in particular some of those older EV forecasts that didn’t anticipate some of the growth that we believe we’re more likely to see now,” Krefta said. This situation has PG&E applying for numerous state and federal grants that could help it meet its electrification targets.
“I think right now people have an overly simplistic view of what electrification of transportation means,” said Kevala CEO Aram Shumavon. “If done right, it will be phenomenal; if mismanaged, there are going to be a lot of upset people, and that is a real risk. That’s a risk for regulators. That’s a risk for politicians, and that’s a risk for utilities.”
Shumavon said that if grid infrastructure doesn’t keep up with the EV boom, drivers can expect charging difficulties such as long queues or only being able to charge at certain times and places. An overly strained grid will also be more vulnerable to extreme weather events and prone to blackouts, which California experienced in 2020.
The most straightforward way to meet growing electricity demand is to bring more energy sources online, preferably green ones. But though it’s easy to site coal and natural gas plants close to population centers, the best solar and wind resources are usually more rural.
But Gramlich said that while we’re constantly spending money replacing and upgrading old lines, we’re hardly building any new ones. “I think we need probably about $20 [million] or $30 million a year on new capacity, new line miles and new delivery capacity. We’re spending close to zero on that right now.”
“If you just think about a line crossing two or three dozen different utility territories, they have a way to recover their costs on their local system, but they kind of throw up their hands when there’s something that benefits three dozen utilities, and who’s supposed to pay, how much, and how are we going to decide?” Gramlich said.
Permitting is a major holdup as well. All new energy projects must undergo a series of impact studies to evaluate what new transmission equipment is required, how much it will cost and who will pay. But the list of projects stuck in this process is massive. The total amount of electricity generation in the queues, almost all of which is renewable, exceeds the total generating capacity on the grid today.
The Inflation Reduction Act has the potential to cut emissions by about 1 billion tons by 2030, according to Princeton’s REPEAT project. But by this same analysis, if transmission infrastructure buildout doesn’t more than double its historical growth rate of 1% per year, more than 80% of these reductions could be lost.
An ‘in-between period’
Efforts are underway to expedite the energy infrastructure buildout. Most notably, Sen. Joe Manchin, D-W.Va., introduced a permitting reform bill in May after similar measures failed last year. President Joe Biden has thrown his support behind the bill, which would speed up permitting for all types of energy projects, including fossil fuel infrastructure. The politics will be tricky to navigate, though, as many Democrats view the bill as overly friendly to fossil fuel interests.
But even if the pace of permitting accelerates and we start spending big on transmission soon, it will still take years to build the infrastructure that’s needed.
“There’s going to be an in-between period where the need is very high, but the transmission can’t be built during the time period where the need happens, and distributed energy resources are going to play a very active role in managing that process, because no other resources will be available,” Shumavon explained.
That means that resources such as residential solar and battery systems could help stabilize the grid as customers generate their own power and sell excess electricity back to the grid. Automakers are also increasingly equipping their EVs with bidirectional charging capabilities, which allow customers to use their giant EV battery packs to power their homes or provide electricity back to the grid, just like a regular home battery system. Tesla doesn’t currently offer this functionality, but has indicated that it will in the coming years, while other models such as the Ford F-150 Lightning and Nissan Leaf already do.
Ford’s all electric F-150 Lightning offers bidirectional charging, allowing customers to use the truck’s EV battery to power their home.
Ford Motor Company
There will also likely be greater emphasis on energy efficiency and energy timing use. PG&E, for example, is thinking about how to optimize charging times for large electric vehicle fleets.
“One thing that we’re trying to do is to work with some of these companies that are putting in substantial loads to provide flexible load constraints where we can say you can only charge 50 EVs at 7 p.m., but at 2 a.m. you can charge all 100,” Krefta said.
Krefta hopes constraints on charging times are temporary, though, and said that moving forward, PG&E is looking to incentivize consumers through dynamic pricing, in which electricity prices are higher during times of peak demand and lower at off-peak hours. And the utility is working with automakers to figure out how electric vehicles can provide maximum benefit to the grid.
“What kinds of things do you need to do in your garage to enable your vehicle to power your home? How can you leverage your vehicle to charge whenever there’s renewables on the grid and they’re clean and low cost and then discharge back to the grid during the evening hours?” Krefta said it’s questions like these that will help create the green grid of the future.
Elon Musk meets with Indian Prime Minister Narendra Modi at Blair House in Washington DC, USA on February 13, 2025.
Anadolu | Anadolu | Getty Images
Tesla is cautiously navigating an entry into India, CFO Vaibhav Taneja said on Tuesday in the U.S., as the electric vehicle maker faces falling sales and tariff threats.
Speaking on an earnings call, Taneja confirmed reports that the company is working on an expansion into India, adding that it would be a great market to enter, thanks to its “big middle class.”
Nevertheless, India is also “a very hard market,” with EV imports into the country subject to a 70% tariff and about 30% luxury tax, he said, noting that this could make India-sold Tesla’s twice as expensive, he said.
“That’s why we’ve been very careful trying to figure out when is the right time… these kinds of things create a little bit of tension, which we are trying to work out,” he added.
India has signaled interest in Tesla setting up a base in the country, though the country’s protectionist policies present some obstacles for the EV maker.
Modi also met with Musk during his visit to Washington, D.C., in February, fueling speculation about Tesla’s plans for India. That same month, sources told CNBC-TV18 that the company was considering importing EVs from its Berlin plant into the country as early as April.
On India’s part, the government has proposed a new policy that could see EV tariffs fall from about 70% to 15% for firms that plan to localize some manufacturing in the country.
However, American President Donald Trump’s new tariffs placed on U.S. trading partners, including India, could cast a cloud over potential negotiations between Tesla and New Delhi.
Washington has imposed additional tariffs of 10% on India, but these could rise by 26% if a 90-day pause on Trump’s “reciprocal tariffs” ends without a U.S.-India trade deal.
Vice President JD Vance met with Modi in India on Monday, hailing “significant” progress made in trade talks between the two countries.
U.S. President Donald Trump talks to the media, next to Tesla CEO Elon Musk with his son X Æ A-12, at the White House in Washington, D.C., U.S., March 11, 2025.
Kevin Lamarque | Reuters
Elon Musk said on Tuesday that he doesn’t like high or unpredictable tariffs, but any decision on what happens with them “is entirely up to the president of the United States.”
Speaking on his company’s first-quarter earnings call, with tariff-related uncertainty swirling across the economy, Musk said Tesla is in a relatively good position, compared to other U.S. automakers, because it has “localized supply chains” in North America, Europe and China.
Musk said Tesla is the “least-affected car company with respect to tariffs at least in most respects.”
Tesla reported troubling quarterly earnings and sales on Tuesday, including a 20% year-over-year drop in automotive revenue and a 71% plunge in net income. The company also said that it wasn’t providing any guidance for 2025 at least until its second-quarter update.
While Musk is one of President Donald Trump’s closest advisers, tariffs are the one issue where he’s partially broken with the administration. He recently called Peter Navarro, Trump’s top trade adviser, a “moron” and “dumber than a sack of bricks.”
On Tuesday’s call, however, Musk said, “If some country is doing something predatory with tariffs,” or “if a government is providing extreme financial support for a particular industry, then you have to do something to counteract that.”
Tesla’s stock price has been hammered since the president floated his plan for widespread tariffs earlier this month, and that was after the shares plunged 36% in the first quarter, their worst performance for any period since 2022.
Because Tesla manufactures cars that it sells in the U.S. domestically, the company isn’t subject to Trump’s 25% tariff on imported cars. But Tesla counts on materials and supplies from China, Mexico, Canada and elsewhere for manufacturing equipment,automotive glass, printed circuit boards, battery cells and other products.
Musk said he offers his advice to the president on tariffs.
“He will listen to my advice. But then it’s up to him, of course, to make his decision,” Musk said. “I’ve been on the record many times saying that I believe lower tariffs are generally a good idea.”
He added that he’s an advocate for “predictable tariff structures,” as well as “free trade and lower tariffs.”
Musk said Tesla’s energy business faces an “outsized” impact from tariffs because it sources lithium iron phosphate battery cells, used in his company’s cars, from China.
“We’re in the process of commissioning equipment for the local manufacturing of LFP battery cells in the U.S.,” he said. But he said the company can “only serve a fraction of our total installed capacity” with its local equipment.
“We’ve also been working on securing additional supply chain from non-china based suppliers, but it will take time,” he said.
Musk called Tesla the most “vertically integrated car company” but said that there are still plenty of parts and materials that come from other countries. Even though it’s built a lithium refinery in Texas, “we’re not growing rubber trees and mining iron yet,” he said.
Elon Musk, CEO of Tesla Inc., in the Oval Office of the White House in Washington, D.C., on Feb. 11, 2025.
Aaron Schwartz | Bloomberg | Getty Images
Tesla CEO Elon Musk began his company’s earnings call on Tuesday by saying that his time spent running President Donald Trump’s Department of Government Efficiency will drop “significantly” starting in May.
Musk, who has watched Tesla’s stock tumble by more than 40% this year, said he’ll continue to support the president with DOGE “to make sure that the waste and fraud that we stop does not come roaring back.”
After spending almost $300 million in the 2024 campaign to help return Trump to the White House, Musk created DOGE and joined the administration with a mission to drastically reduce the size and capability of the federal government.
He said he’ll continue to spend a “day or two per week” on government issues “for as long as the president would like me to do so.”
Musk’s commentary came after his company reported disappointing first-quarter results, including a 20% year-over-year slump in automotive revenue and 71% plunge in net income.
In addition to challenges the company already faced, such as competition out of China and an aging fleet of electric vehicles, Tesla has recently been hit with protests in the U.S. and Europe and brand damage due to Musk’s ties to Trump and his support of Germany’s far-right AfD party.
“The protests that you’ll see out there, they’re very organized,” Musk said on Tuesday’s call. He claimed, without evidence, that some people are likely protesting “because they’re receiving fraudulent money” or are “recipients of wasteful largesse.”
On its website, which was last updated on Sunday, DOGE says its cuts have led to an estimated $160 billion in savings. However, Musk’s estimates of savings have been challenged, and DOGE has deleted some of the largest purported savings.
Over that same stretch, Tesla has lost roughly $600 billion in market cap.
DOGE has also made cuts at agencies charged with oversight of his companies. They include the SEC, Federal Aviation Administration and National Highway Traffic Safety Administration.
The White House said in early February that Musk was serving as a “special government employee,” a designation with fewer requirements when it comes to conflict-of-interest disclosures and ethics policies.
The Department of Justice says the title is for anyone expected to work for the government for 130 days or less in a year. The Trump administration will hit its 130th day at the end of May.
Job cuts from DOGE’s work have come from across the government, at agencies including the Internal Revenue Service, National Park Service, Consumer Financial Protection Bureau, and the departments of Agriculture, Education, Energy, Health and Human Services, Homeland Security, and Veterans Affairs, according to the Associated Press.
As of February, staffers from DOGE had pushed top-ranking officials at the Department of Education out of their offices, rearranged the furniture and set up white noise machines to muffle their voices, according to employees at the agency. U.S. senators expressed concern that DOGE had possibly gained access to federal student loan data on tens of millions of borrowers.
Also in February, the Trump administration said that USAID would shut down as an independent agency and be moved under the State Department.